SAP SE (; ) is a German multinational software company based in Walldorf, Baden-Württemberg. It develops enterprise software to manage business operations and customer relations. The company is the world's leading enterprise resource planning (ERP) software vendor.
Founded in 1972 as a private partnership named ''Systemanalyse und Programmentwicklung'' (literally ''System Analysis and Software Development''). SAP GbR became in 1981 fully ''Systeme, Anwendungen und Produkte in der Datenverarbeitung'' abbreviated SAP GmbH after a five-year transition period beginning in 1976. In 2005, it further restructured itself as SAP AG. Since 7 July 2014, its corporate structure is that of a pan-European '' societas Europaea'' (SE); as such, its former German corporate identity is now a subsidiary, SAP Deutschland SE & Co. KG''.'' It has regional offices in 180 countries and over 111,961 employees.
SAP is a component of the
DAX
Dax or DAX may refer to:
Business and organizations
* DAX, stock market index of the top 40 German companies
** DAX 100, an expanded index of 100 stocks, superseded by the HDAX
** TecDAX, stock index of the top 30 German technology firms
* Dax ...
market capitalization
Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders.
Market capitalization is equal to the market price per common share multiplied by t ...
.
Products
As well as its main ERP products, the company also sells database software and technology (particularly its own brand,
SAP HANA
SAP HANA (HochleistungsANalyseAnwendung or High-performance ANalytic Application) is an in-memory, column-oriented, relational database management system developed and marketed by SAP SE. Its primary function as the software running a databas ...
human capital management
Humans (''Homo sapiens'') are the most abundant and widespread species of primate, characterized by bipedalism and exceptional cognitive skills due to a large and complex brain. This has enabled the development of advanced tools, culture, an ...
enterprise performance management
Enterprise performance management (EPM) is a field of business performance management which considers the visibility of operations in a closed-loop model across all facets of the enterprise. Specific to financial activities in the office of the c ...
supply chain management
In commerce, supply chain management (SCM) is the management of the flow of goods and services including all processes that transform raw materials into final products between businesses and locations. This can include the movement and stor ...
programming environment
An integrated development environment (IDE) is a software application that provides comprehensive facilities to computer programmers for software development. An IDE normally consists of at least a source code editor, build automation tools a ...
SAP AppGyver for business
History
Formation
When Xerox exited the computer hardware manufacturing industry in 1971, it asked IBM to migrate its business systems to IBM technology. As part of IBM's compensation for the migration, IBM was given the rights to the Scientific Data Systems (SDS)/SAPE software repository.
Five IBM engineers from the AI department''International Directory of Company Histories'', Vol. 16. St James Press, 1997. ( Dietmar Hopp,
Klaus Tschira
Klaus Tschira (7 December 1940 – 31 March 2015) was a German billionaire entrepreneur and the co-founder of the German software company SAP AG.
Life
After gaining his Diplom in physics and working at IBM, Tschira co-founded the German sof ...
Claus Wellenreuther
Claus Wellenreuther (born 1935) is a German entrepreneur and the co-founder of the software company SAP SE.
Career
Wellenreuther was born in MannheimMannheim, Baden-Württemberg) were working on an enterprise-wide system based on this software, only to be told that it would no longer be necessary. Rather than abandoning the project, they decided to leave IBM Tech and start another company.
In June 1972 they founded the SAP ("System Analysis and Program Development" / "SAPD") company, as a private partnership under the German Civil Code.
Their first client was the German branch of
Imperial Chemical Industries
Imperial Chemical Industries (ICI) was a British chemical company. It was, for much of its history, the largest manufacturer in Britain.
It was formed by the merger of four leading British chemical companies in 1926.
Its headquarters were at M ...
in Östringen, where they developed mainframe programs for payroll and accounting. Instead of storing the data on punch cards mechanically, as IBM did, they stored it locally in the Electronic System while using a common Logical database for all activities of Organization. Therefore, they called their software a real-time system, since there was no need to process the punch cards overnight (for this reason their flagship product carried an R in its name until the late 1990s). This first version was also a standalone software that could be offered to other interested parties.
Acquisitions
Since 1991, SAP has acquired more than 70 companies.
Enterprise resource planning
In 1973 the first commercial product was launched. SAP completed its first financial accounting system - RF. This system served as the cornerstone in the ongoing development of other software modules of the system that eventually bore the name SAP R/1.
This offered a common system for multiple tasks. This permitted the use of a centralized data storage, improving the maintenance of data. From a technical point of view, therefore, a database was necessary.
In 1976 SAP GmbH Systeme, Anwendungen und Produkte in der Datenverarbeitung ("Systems, Applications, and Products in Data Processing") was founded as a sales and support subsidiary. Five years later, the private partnership was dissolved and its rights were passed on to SAP GmbH.
The headquarters moved the following year to Walldorf, Germany. Three years later, in 1979, SAP launched
SAP R/2 SAP R/2 is an older version of real-time enterprise resource planning (ERP) software produced by the German company SAP AG, that was replaced by SAP R/3.
SAP R/2 launched in 1979 and followed the company's first product, a materials management modu ...
, expanding the capabilities of the system to other areas, such as material management and production planning. In 1981, SAP brought a re-designed product to market. However, SAP R/2 did not improve until the period between 1985 and 1990. SAP released the new SAP R/3 in 1992. SAP developed and released several versions of R/3 through 1995. By the mid-1990s, SAP followed the trend from
mainframe
A mainframe computer, informally called a mainframe or big iron, is a computer used primarily by large organizations for critical applications like bulk data processing for tasks such as censuses, industry and consumer statistics, enterprise ...
computing to client–server architectures. The development of SAP's internet strategy with mySAP.com redesigned the concept of business processes (integration via Internet). As a result, R/3 was replaced with the introduction of SAP ERP Central Component (ECC) 5.0 in 2004. Architectural changes were also made to support an enterprise service architecture to transition customers to a service-oriented architecture. The latest version, SAP ERP 6.0, was released in 2006. SAP ERP 6.0 has since then been updated through SAP enhancement packs, the most recent: SAP enhancement package 8 for SAP ERP 6.0 in 2016.
Corporate restructuring
In August 1988 SAP GmbH became SAP AG, and public trading started on 4 November 1988. Shares were listed on the Frankfurt and Stuttgart stock exchanges. In 1995, SAP was included in the German stock index
DAX
Dax or DAX may refer to:
Business and organizations
* DAX, stock market index of the top 40 German companies
** DAX 100, an expanded index of 100 stocks, superseded by the HDAX
** TecDAX, stock index of the top 30 German technology firms
* Dax ...
and, on 22 September 2003, SAP was included in the STOXX Europe 50.
SAP AG era
The company's official name became ''SAP AG'' (a public limited company) after the 2005 annual general meeting.
SAP SE era
On 21 May 2014, SAP AG announced during the Annual General Meeting of Shareholders that 99% of the shareholder votes approved the conversion of legal form to a European stock corporation ( Societas Europaea, SE) and at the same time, elected the first supervisory board of SAP SE. The conversion of the company's legal form would take place upon entry in the commercial register, expected to be in July 2014.
On 7 July 2014, SAP announced it had changed its legal form to a European Company (Societas Europaea, SE). As a result, its German subsidiary was renamed to SAP Deutschland SE & Co. KG. The conversion cost the company approximately €4 million.
Focus on cloud
Since 2012 SAP has acquired several companies that sell cloud-based products, with several multi-billion-dollar acquisitions seen by analysts as an attempt to challenge competitor
Oracle
An oracle is a person or agency considered to provide wise and insightful counsel or prophetic predictions, most notably including precognition of the future, inspired by deities. As such, it is a form of divination.
Description
The word '' ...
. In 2016 SAP bought Concur Technologies, a provider of cloud-based travel and expense management software, for $8.3 billion, SAP's most expensive purchase to that date. Analysts' reactions to the purchase were mixed, with Thomas Becker of
Commerzbank
Commerzbank AG () is a major German bank operating as a universal bank, headquartered in Frankfurt am Main. In the 2019 financial year, the bank was the second largest in Germany by the total value of its balance sheet. Founded in 1870 in Hambur ...
questioning whether Concur was the right choice for SAP, while Credit Suisse called the acquisition an "aggressive" move.
In 2014 IBM and SAP began a partnership to sell cloud-based services. Likewise, in 2015, SAP also partnered with HPE to provide secure hybrid cloud-based services running the SAP platform. Both HPE and IBM provide infrastructure services to SAP, and SAP runs its SAP HANA cloud solution on top. SAP has announced additional partnerships with Microsoft in order to give customers tools for data visualization, as well as improved mobile applications.
SAP exceeded its revenue projections due to the expansion in its cloud business and the success of SAP HANA. The growth can also be partially attributed to the acquisitions of Concur and Fieldglass. Since 2017, SAP is a founding member of the EU Cloud Code of Conduct. Since May 2021 SAP has listed selected Cloud Service adherent to the EU Cloud Code of Conduct as one of the first Cloud Service Providers.
The company announced plans in 2016 to invest heavily into technology relating to the
Internet of things
The Internet of things (IoT) describes physical objects (or groups of such objects) with sensors, processing ability, software and other technologies that connect and exchange data with other devices and systems over the Internet or other comm ...
(IoT) as part of a strategy to capitalize on the growth in that market. For that purpose, €2 billion is planned for investment in relevant sectors by the end of 2020. SAP will also launch a new product line called SAP IoT, which "will combine large amounts of data from things connected to the Internet with machine learning and SAP's real-time database S/4 HANA."
On 29 January 2019 SAP announced plans to cut approximately 4,000 positions at the company in a strategic plan to shift to more modern cloud-based technologies such as
blockchain
A blockchain is a type of distributed ledger technology (DLT) that consists of growing lists of records, called ''blocks'', that are securely linked together using cryptography. Each block contains a cryptographic hash of the previous block, a ...
,
quantum computing
Quantum computing is a type of computation whose operations can harness the phenomena of quantum mechanics, such as superposition, interference, and entanglement. Devices that perform quantum computations are known as quantum computers. Though ...
Internet of Things
The Internet of things (IoT) describes physical objects (or groups of such objects) with sensors, processing ability, software and other technologies that connect and exchange data with other devices and systems over the Internet or other comm ...
On 13 April 2021 SAP announced the formation of the joint venture ''SAP Fioneer'', a dedicated Financial Services Industry (FSI) Unit between SAP and investment company Dediq GmbH. Dediq GmbH invested over €500 million in the newly formed unit and received an 80 percent share in return. SAP brought its products, organizational units and the sales network into the business and holds 20 percent of the shares.
Corporate affairs
Ownership
SAP had the following ownership structure in early 2024:
Jennifer Morgan
Jennifer Morgan (born March 13, 1971) is an American technology executive. She is the former Co-Chief Executive Officer at SAP SE. Morgan became the first American woman ever appointed to the SAP Executive Board in 2017. Morgan is the first femal ...
and
Christian Klein
Christian Klein is a German manager who is the current Chief Executive Officer at SAP SE. After the departure of Jennifer Morgan SAP SE is returning to sole CEO model.
Career
Klein started his career at SAP in 1999 as a student. Since October 1 ...
were appointed as co-
CEO
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
s of SAP. In April 2020 it was announced that
Jennifer Morgan
Jennifer Morgan (born March 13, 1971) is an American technology executive. She is the former Co-Chief Executive Officer at SAP SE. Morgan became the first American woman ever appointed to the SAP Executive Board in 2017. Morgan is the first femal ...
will leave SAP and Christian Klein will continue to operate as the sole CEO, citing that the current environment of the COVID-19 recession requires "companies to take swift, determined action which is best supported by a very clear leadership structure".
The majority of the company's employees are in Germany and United States. About 20,000 employees are based in Germany and about 19,311 employees are based in the United States.
45 employee representatives were elected in 2022 to the SAP ''SE Works Council'', including 15 candidates from the
Ver.di
(''Verdi'' (stylized as ''ver.di''; vɛʁdiː; German: ''United Services Trade Union'') is a German trade union based in Berlin, Germany. It was established on 19 March 2001 as the result of a merger of five individual unions and is a memb ...
and IG Metall trade union lists. They represent 17,000 employees of Germany.
Headquarters is responsible for overall management as well as core engineering activities related to product development. Worldwide customer support is not provided by the field organizations but by a unified organization called Active Global Support (AGS).
Finances
For the fiscal year 2017 SAP reported earnings of €4 billion, with an annual revenue of €23.5 billion, an increase of 6.3% over the previous fiscal cycle. SAP's shares traded at over US$154 per share, and its market capitalization was valued at US$180 billion in December 2023, making it the largest German company by
market capitalization
Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders.
Market capitalization is equal to the market price per common share multiplied by t ...
.
The key trends for SAP are (as at the financial year ending 31 March):
Business and markets
As of 2016, SAP was the world's fourth-largest software and programming company. The corporation operates in Europe, Asia, Africa, the Middle East, North America, and South America.
SAP focuses on 25 industries and six industry sectors: process industries, discrete industries, consumer industries, service industries, financial services and public services. It offers integrated product sets for large enterprises, mid-sized companies and small businesses.
Partnerships
SAP partners include Global Services Partners with cross-industry multinational consulting capabilities, SAP University Alliances, Global Software Partners providing integrated products that complement SAP Business Suite solutions, and Global Technology Partners providing user companies with a wide range of products to support SAP technology, including vendors of hardware, database, storage systems, networks, and mobile computing technology.
Extensions partners are companies which provide functionality that complements SAP product capabilities. Their products are certified, sold, and supported by SAP. These partner companies include
Adobe
Adobe ( ; ) is a building material made from earth and organic materials. is Spanish for ''mudbrick''. In some English-speaking regions of Spanish heritage, such as the Southwestern United States, the term is used to refer to any kind of e ...
GK Software
GK Software Societas Europaea, SE is a listed technology company headquartered in Schöneck, Saxony, Schöneck/Vogtland. The company specializes in software and services for the operation of large retail company branches. GK employs about 1,114 i ...
Hewlett-Packard
The Hewlett-Packard Company, commonly shortened to Hewlett-Packard ( ) or HP, was an American multinational information technology company headquartered in Palo Alto, California. HP developed and provided a wide variety of hardware components ...
,
IDS Scheer
IDS Scheer was a software company that developed, marketed, and supported Business Process Management (BPM) software. It has been regarded as the founder of the BPM industry.ITWire. IDS Scheer Launches in Australia” July 5, 2007. Retrieved May ...
, Mendix, OpenText, Knoa Software, and BackOffice Associates.
SAP has also partnered with Apple to work on the mobile experience for SAP enterprise customers. As part of the partnership, a new
SAP HANA Cloud Platform
SAP Cloud Platform has been rebranded as SAP Business Technology Platform (BTP).
SAP Cloud Platform (SCP) was a platform as a service developed by SAP SE for creating new applications or extending existing applications in a secure cloud computing ...
SDK would be delivered exclusively for iOS. As a result, developers can build applications based on the SAP HANA Cloud Platform for the iPhone and iPad devices. The partnership was announced in May 2016.
In 2019 SAP announced a three-year partnership "Embrace" with Microsoft that should allow its clients to move their business process into the cloud, although significant portions of that partnership were reduced to two years. SAP teams up on cloud sales with Microsoft
In 2020 SAP announced that together with Wipro it will co-develop and market "solutions for the retail and fashion industry."
SAP Labs
SAP Labs are research and development locations that develop and improve SAP core products. SAP Labs are strategically located in high-tech clusters around the globe.
The four most prominent labs of SAP SE are located in Germany, Japan, Israel and the US. Labs Walldorf was founded in 1972 and became SAP's primary location. At the beginning, the focus of SAP's expansion was entering highly developed IT markets; in 1993, Palo Alto became a part of SAP Labs. Aiming to acquire talented employees, SAP opened another lab in Bangalore in 2003.
SAP Labs in Czech Republic, Slovakia and Poland were established in 2016. The lab in India is SAP's largest outside Germany as of 2016.
In order to manage SAP Labs, SAP Labs Network (SLN) was created. SLN is a global unit that manages regional Labs and shares best business practices. It coordinates and distributes development projects among individual SAP Labs locations, accelerates product delivery, gives SAP full access to talent, and drives SAP corporate strategy regarding innovation and business growth.
Philanthropic efforts
SAP has donated several millions of dollars to a variety of global health causes including the Product Red campaign and the Global Fund. In addition, SAP has distributed free software in South Africa as part of an effort towards developing future markets there. The company also encourages employees to volunteer through social sabbaticals, sending teams of people to different countries to aid non-profits. SAP employees have volunteered in China, India, Brazil, and South Africa.
Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
, SAP was ordered to pay $220 million to resolve violations of the
Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests.
The FCPA is applicable world ...
in South Africa, Indonesia, Tanzania, Malawi, Ghana, Kenya, Zimbabwe and Azerbaijan. It paid bribes to officials in
state-owned enterprises
A state-owned enterprise (SOE) is a government entity which is established or nationalised by the ''national government'' or ''provincial government'' by an executive order or an act of legislation in order to earn profit for the governmen ...
to gain government contracts. It entered into a three-year deferred prosecution agreement, paying a criminal penalty of $118.8 million and an administrative forfeiture of $103,396,765.
In South Africa SAP used third-party intermediaries to acquire tenders from various state-owned entities, including Transnet, the
South African Revenue Service
The South African Revenue Service (SARS) is the revenue service of the South African government. It administers the country's tax system and customs service, and enforces compliance with related legislation. It is governed by the SARS Act 34 of ...
In 2021 SAP admitted in a United States court that it exported software to firms in Iran, contrary to US sanctions against Iran, which led to a fine of $8 million.
East African allegations
In February 2019 SAP was accused of 'improper conduct' linked to state contracts in Kenya and Tanzania. An anonymous whistle-blower claims, through a firm of attorneys, that SAP used Twenty Third Century Systems (TTCS) to bribe officials at the Tanzania Ports Authority (TPA) to win a US$6.6 million enterprise resource planning software tender that involved the provision of software licenses and services.
South African allegations
In July 2017 allegations were made that SAP had been involved in business transactions with the controversial and politically influential
Gupta family
The Gupta family is a wealthy Indian-born family with business interests in South Africa, whose most notable members are brothers Ajay, Atul, and Rajesh "Tony" Gupta—as well as Atul's nephews Varun, and US-based Ashish and Amol. The family ow ...
in South Africa. SAP was accused of paying CAD House, a Gupta-controlled company, R100 million in order to secure a Transnet deal. SAP denied the allegations, claiming that the money was paid as "an extension of the sales force", despite CAD House having no prior SAP experience.
The dealings of the Gupta family with SAP were revealed in a widely publicized e-mail leak.
As a consequence of the allegations SAP launched an investigation that led to four of its South African managers being placed on administrative leave along with the seizure of their mobile phones and computers. Claas Kuehnemann was named as acting managing director for Africa while the investigation continued.
On 26 October 2017 SAP announced that it had voluntarily reported itself to the U.S. Securities and Exchange Commission (SEC) for a possible violation of US law, including the
Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests.
The FCPA is applicable world ...
(FCPA), related to the South African bribery allegations. SAP's own investigation, conducted by law firm Baker McKenzie, revealed that SAP had paid $7.7 million in commissions to third-parties linked to the Gupta family while securing contracts worth $48 million with Transnet and Eskom.
Panamanian bribery
Since May 2015, the company has dealt with a series of high-profile
bribery
Bribery is the Offer and acceptance, offering, Gift, giving, Offer and acceptance, receiving, or Solicitation, soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty. With reg ...
investigations, including one that led to them paying $3.9 million to settle U.S. Securities and Exchange Commission civil charges over a former executive's scheme to bribe Panama government officials in order to win lucrative technology contracts.
Allegations of intellectual property theft and fraud
In 2018 and in an ongoing court battle, Teradata accused SAP of IP theft and
fraud
In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compens ...
ulent behaviour. In 2021, in the German weekly news magazine
Der Spiegel
''Der Spiegel'' (, lit. ''"The Mirror"'') is a German weekly news magazine published in Hamburg. With a weekly circulation of 695,100 copies, it was the largest such publication in Europe in 2011. It was founded in 1947 by John Seymour Chaloner ...
, additional claims were made of questionable behaviour with regards to SAP's funding of researchers at the University of Mannheim - who were in effect paid by SAP to investigate competitors technology. In a later article,
Der Spiegel
''Der Spiegel'' (, lit. ''"The Mirror"'') is a German weekly news magazine published in Hamburg. With a weekly circulation of 695,100 copies, it was the largest such publication in Europe in 2011. It was founded in 1947 by John Seymour Chaloner ...
magazine maintained that SAP had been neglectful in maintaining strict governance for years.
In June 2022 the German business magazine Manager Magazin published an article stating the management style of the leadership might be responsible for an increased
compliance
Compliance can mean:
Healthcare
* Compliance (medicine), a patient's (or doctor's) adherence to a recommended course of treatment
* Compliance (physiology), the tendency of a hollow organ to resist recoil toward its original dimensions (this is a ...
risk.
Bullying claims and misogyny
In May 2022 multiple claims were made of
bullying
Bullying is the use of force, coercion, hurtful teasing or threat, to abuse, aggressively dominate or intimidate. The behavior is often repeated and habitual. One essential prerequisite is the perception (by the bully or by others) of an imba ...
and
sexual harassment
Sexual harassment is a type of harassment involving the use of explicit or implicit sexual overtones, including the unwelcome and inappropriate promises of rewards in exchange for sexual favors. Sexual harassment includes a range of actions fro ...
within the company, with many cases of unwanted advances by senior male managers on female colleagues. When complaints were made or information made available, HR were found to be unhelpful or hostile. For example, in one case a female employee was groped by a male manager in Sydney while at a company event, but he was never brought to account. In another case, a female employee was sexually targeted by a manager and asked to keep her web camera on during the day. She then complained and was placed under "performance management" - a precursor to being asked to leave the company. Several female executives, including the Co-CEO left the company, adding to concerns that women were negatively treated, despite SAP then hiring several other senior women from Microsoft.